Torres v. Lloyd's of London Syndicate 4242, 1:10-cv-00200

Background

Plaintiffs Moises L. Torres and Irma Torres insured under a Named Peril Commercial Property Policy; dispute whether ICAT Managers and Bass Underwriters are contract parties alongside Lloyd's of London Syndicate 4242.
Plaintiffs filed a May 14, 2010 claim for wind damage from Hurricane Dolly; Syndicate 4242 through Boulder Claims investigates, with Amzibel as senior adjuster handling the claim.
Independent adjuster GAB Robins and engineer PT&C conducted inspections in May 2010; preliminary reports suggested no wind damage and a theory that stucco cracks resulted from long-term construction issues.
In June 2010, Foster (PT&C) and Mota (GAB) prepared reports supporting no wind damage; Amzibel formally denied the claim on June 22, 2010, sending Foster's report and policy excerpts.
Plaintiffs later hired Nelson Jones (Rabner and Flores) who, in November–December 2010, concluded damage consistent with a hurricane, including water and wind damage; Rabner supervised Flores' report.
Defendants moved to strike plaintiffs' expert designations; plaintiffs sought leave to amend; the court denied the strike and granted amendments, and later granted in part and denied in part summary judgment on various claims, with certain Texas Insurance Code claims remaining at issue.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is ICAT/Bass liable on the contract?	Torres contend ICAT/Bass are contract parties; the policy lists them as involved entities.	Policy shows ICAT as Correspondent and Bass as Producer; they are not insurers and not liable.	Only Syndicate 4242 liable; ICAT/Bass not liable on contract.
Did bad faith and Texas Insurance Code claims survive summary judgment?	Defendants denied coverage without reasonable basis; failed to deal in good faith.	Rely on independent adjuster/engineer reports supporting denial; no bad faith given factual dispute was reasonable.	Bad faith and Texas Insurance Code claims against all Defendants survive only to the extent found; several claims granted in favor of defendants (summary judgment with partial denial).
Were Texas Insurance Code § 541.060(a)(1), (a)(3), (a)(4) satisfied and Promotion of Claims § 542.055/056/058 complied with?	Defendants misrepresented coverage; delayed or mishandled claim processing.	Investigations and communications complied with statutory timelines and policy terms.	Summary judgment granted against defendants on several subsections; §542.058 issue reserved for unresolved policy liability; other subsections denied to plaintiffs.
Do fraud or conspiracy claims hold?	Defendants misrepresented and conspired to deny coverage; evidence will show a meeting of minds.	No misrepresentation or agreement; reliance on expert reports reasonable; no underlying tort showing.	Fraud and conspiracy claims fail as a matter of law.
Did the court grant relief or continuances for discovery/depositions?	Plaintiffs needed additional discovery to oppose summary judgment.	Court scheduling orders limit post-deadline discovery; no stay granted.	Continued relief denied; discovery-related depositions addressed as moot in light of scheduling orders.

Key Cases Cited

State Farm Lloyds v. Nicolau, 951 S.W.2d 444 (Tex. 1997) (insurer's bad-faith standard; pretextual reliance on biased experts can show bad faith)
Transp. Ins. Co. v. Moriel, 879 S.W.2d 10 (Tex. 1994) ( bona fide dispute does not prove bad faith; objective reasonableness of investigation matters)
Lee v. Catlin Specialty Ins. Co., 766 F. Supp. 2d 812 (S.D. Tex. 2011) (insurer's misrepresentation claim analysis in Texas Insurance Code context)
Connelly v. Service Lloyds Ins. Co., 910 S.W.2d 557 (Tex. App.-Beaumont 1995) (evidence standards for insurer's investigation and settlement)
Aranda v. Ins. Co. of N. Am., 748 S.W.2d 210 (Tex. 1988) ( Texas bad faith framework and conduct standards)
Lockett v. Wal-Mart Stores, Inc., 337 F. Supp. 2d 887 (E.D. Tex. 2004) (summary judgment standards and required showing of genuine issues)